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Forex Analysis & Reviews: GBP/USD. September 24. Results of the day. Fifth defeat of Boris Johnson
time 25.09.2019 01:09 AM
time Relevance up to, 25.09.2019 04:03 PM

4-hour timeframe

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Amplitude of the last 5 days (high-low): 134p - 73p - 122p - 124p - 78p.

Average volatility over the past 5 days: 106p (high).

Well, from our point of view, Boris Johnson suffered a significant defeat today. By and large, the Supreme Court of Great Britain today recognized that the prime minister abused power, and also deliberately misled Queen Elizabeth II, who, in fact, approved Johnson's request to suspend Parliament. The court decision was unanimous; all 11 judges ruled that Johnson's decision was unlawful. We would like to focus the attention of traders on the fact that this is an abuse of power by the head of state. That is now what Boris Johnson can be accused of. And if you add to this all his previous defeats, wars, confrontations, backstage games and attempts to circumvent the laws of the UK, a very unpleasant picture emerges. For the prime minister, of course. It is still difficult to say whether this defeat in court will affect the ratings of the Conservative Party and personally of Boris Johnson. According to the latest sociological research, at least 30% of voters are ready to cast their votes for Conservatives. The remaining parties will be content with fewer votes. However, the situation may change for the worse for Conservatives.

Opposition leader Jeremy Corbyn has already urged Boris Johnson to resign, as well as to immediately resume Parliament. Corbyn also said that he urged Johnson to "weigh his position" and "become the prime minister who was least in power."

Boris Johnson, who is in New York at the UN General Assembly session, managed to give his comments. He stated that he deeply respects the UK judicial system and will comply with a court order. At the same time, Johnson said that he "strongly disagrees with the decision of the Supreme Court." "I don't think it was the right decision," Johnson summed up.

Thus, in the near future, the Parliament should resume its work, and the deputies will continue to struggle with Boris Johnson. The Speaker of the House of Commons, John Bercow, has already welcomed the court ruling: "The House of Commons, which represents our parliamentary democracy, must assemble without delay," he said. We want to note that if in the beginning of summer deputies simply fought against the "hard" Brexit, now the prime minister will have to deal with angry deputies who are eager for his resignation. Frank disappointment is already observed in the camp of Conservatives. Conservative Party member Andrew Bridgen called the court ruling "the worst for democracy." According to Bridgen, the Parliament will now "hold democracy hostage", and "the speaker of the House of Commons will actually control the Parliament." Bridgen preferred not to mention that it was precisely the principle of democracy that Boris Johnson bypassed when he initiated the prorogation of Parliament.

Well, what about the pound? Today, the UK currency has received very reasonable support. The pound increased by 60 points and recovered to the Kijun-sen critical line. However, it is too early to talk about the resumption of an upward trend. Now we need to wait for the moment when Parliament will officially resume work, and wait for the development of events in the war for Brexit. But if the pound/dollar pair manages to gain a foothold back above the Kijun-sen line, this will be a heavy bid by the bulls for new hikes up.

Trading recommendations:

The GBP/USD currency pair has now returned to the critical line. Thus, it is now recommended to wait until the correction against the downward trend is completed and resume small sales of the pair with the target of 1.2382. If the bulls manage to overcome the Kijun-sen line, then pound purchases with the first target of 1.2572 will become relevant.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2022
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